Puerto Rico Tobacco Bonds Cut to Junk by S&P on Debt Moratorium
- Debt was among the last on the island with investment grades
- Bond payments `could potentially be interrupted,' analysts say
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Puerto Rico tobacco bonds issued by Children’s Trust were cut to junk by Standard & Poor’s because of the agency’s inclusion in the island’s debt moratorium law.
Securities maturing in 2033 and 2039 had their ratings cut three and two steps, respectively, to BB, two levels below investment grade, S&P said Monday in a report. The credit rater put a negative watch on the two portions, as well as another already-junk segment due in 2043, signaling the chance of more downgrades in the coming months.